The Financial Future of Game Developers

http://www.raphkoster.com/2014/05/07/the-financial-future-of-game-developers/

by captaincrowbar • 12 years ago

111 54 12 years ago

zanny• 12 years ago

How about just not selling your soul to soul sucking distributors like Apple or Valve?

The real question is do you want fame and industry class "success" (ie, your game sells millions) or do you want to be creative. Terrible example, yada yada, but Minecraft is still being sold from the Mojang site where the company (and originally Notch) gets 100% of proceeds.

If you want to see millions of people play your games, with millions of copies sold, with front page storefront ads, then yeah, you sell your soul to the entrenched interests. But you don't have to play their game - you just need:

1. An Audience who likes your content. 2. A way to eat as a result of that content.

Really, the obvious answer is the audience plays patron as the article denoted funder. That, in the long term, is the macroscopic way this is all trending anyway.

And I'm not talking kickstarter style get-a-bunch-of-money-at-once-and-blow-it-all. I mean you have an (open) product, put it out there, advertise it however you want (personally or outsourced) and hope that those that experience it think its worth continued funding.

Also, metaconsoles is kind of a misnomer - you have a platform spectrum, from open accessible platforms to walled gardens with padlocks. On one side, you have the wild west of self-hosted downloads for free platforms like Android (without the play store, think fdroid) or desktop Linux, and you progress from there through Windows, the Play Store, OSX, and finally the iOS / old console locked down ecosystem where you need a developers license, development tools from the source, etc.

Yeah, Steam is barely better than a console - they act as gatekeeper and takes a huge cut - but on the platforms Steam supports, you at least have the option to use other platforms as well, like gog, the humble store, desura, or self hosting. When there is whole stack lock down like on the traditional consoles and iOS, you are literally praying at the alter of the corporate owner that they give you a blessing.

RKoster3• 12 years ago

Other storefronts... That would be nice if people could make money on those other distribution channels. Unfortunately, they can't, by and large. Most people don't find the effort worth it to even sign up with Amazon, which has a huge addressable market. I have never even seen a sales report with money from fdroid. For devs who are trying to make a living just from games, anything other than Steam, iOS, and for some people, Google Play, is basically irrelevant. Unless you land in a Humble Bundle.

As far as the loyal audience, yes, I agree with you on that, even mentioned it in the article. But that's not a living wage for most, and the latest research says that sort of environment is more susceptible to a hit-driven winner-takes-all market. That leads to an ugly place as regards the income levels for the typical dev.

jib• 12 years ago

Isn't this the same problem that music has though? The vast majority of musicians don't make a huge living from creating their own music. You either do it for the joy of it with the hope of possibly being discovered. Struggling artist etc. With the main difference being that software developers skills are also hugely wanted in other markets, which musician skills normally aren't.

On some level, its a question of how you both eat the cookie and have it, right? What independent game developers want is some guarantee of a base income, but also with the option to cash in big if they do make it big.

Maybe there is an opportunity there - I'm not sure if a credits organisation is what you're looking for. But maybe something like a self-organised fund that will buy stakes in individual projects, where the stakes are paid out more in a salary style?

Semi-organised group of indie-game developers that guarantee a (lowish) living income to all in the group in exchange for a relatively large chunk of any large windfalls to support the future. If games are actually sustainable then something like that feels like it could stand a reasonable chance, right? Assuming you get past a critical size and have some name recognition. Could also move into the same benefit areas that unions do.

Essentially something like your own very light-weight union/co-op.

speeder• 12 years ago

"How about just not selling your soul to soul sucking distributors like Apple"

Alright, I have a mobile game company, currently very unprofitable.

Also we have our stuff on iTunes, because that is the only way we know to distribute on iPhone and iPad.

Tell me sir, a way to distribute to our end users easily, and I will PROMPTLY figure how to do it.

(by the way, we are already on Google Play too, and almost any random android store you can think, even ones that net us 1 download per month, even carrier stores at the other side of the planet too).

dmpk2k2• 12 years ago

Just a few years ago Valve was being lauded for giving developers a viable new channel that took a very small slice of the pie (~30%) compared to what had come before (>90%). Plus the indies that have managed to get on have consistently noted that the before & after revenue is like night and day.

Not soul-sucking. There are other things to complain about Valve, but 30% for their services is not one of them.

angersock3• 12 years ago

One hardly pines for the days where you'd cut a gold master and hope (hope!) that you could convince users to patch things if there was a bug or try to figure out with how to get a massive number of physical units shipped.

Steam has provided a tremendously better experience in all aspects to the old methods of selling and maintaining games.

kevingadd3• 12 years ago

Valve's cut was never smaller compared to competitors. There's a reason why they insisted on all the terms of their deals (and sales numbers) being secret; they are still really brutal about not being able to share contract terms or revenue numbers.

Hell, I shipped a fucking game on Steam and I don't know what the % we gave them was (though I could probably figure it out by doing enough math on the sales numbers...)

One thing I do know (second-hand information, but from an expert) is that they even demand a huge cut from F2P games, despite the fact that F2P games have their own download, patching and payment infrastructure. They literally charge as much as they can possibly get away with, even when they offer near-zero service.

The quality of the services Valve offers for your money is also fairly low. The Steam API breaks constantly (usually because they are haphazard about changes and have near-zero automated or manual testing), is poorly documented, and is infrequently maintained. Valve can and will ship a Steamworks update that breaks a core part of your game, and leave it broken for weeks no matter how often you complain - unless you happen to have the phone number of someone at the company, or send them numerous emails. The APIs that do work are slow and limited. It's better than nothing, certainly, but not so magnificent that it's worth 30%, especially if you compare it with something like GAE or EC2.

nemothekid• 12 years ago

Can you give another example other than Minecraft? Saying Minecraft was successful because it was self-distributed is about as useful as saying Zuckerberg is successful because he dropped out of school.

TillE• 12 years ago

Mount&Blade. Exact same model (reduced price beta, all sales direct), before Minecraft.

As with most types of entrepreneurship, the answer is to look for niches rather than chasing massive pop culture success.

jlees• 12 years ago

I mean you have an (open) product, put it out there, advertise it however you want (personally or outsourced) and hope that those that experience it think its worth continued funding.

It sounds so easy in theory, doesn't it?

Getting a game in front of people who enjoy it enough to give you money is hard. Very hard. Raph's ideas from 2006 around direct relationships and celebrity are still very much on target today -- that's how most successful creators seem to manage it, beyond the randomness of viral outbreaks. (I count entering/winning the IGF as a form of celebrity.)

Beyond that, advertising it is a spray-and-pray that will likely suck up more of your money than you'll ever make, and net you a bunch of high-churn players who don't give a toss about what you've created. Not every game has an obvious niche audience to go after, not every creator welcomes or invites celebrity, and sometimes the weirdest, most un-game-like things hit a nerve nobody was expecting.

My mind keeps circling back to the 'people who bought x also liked..' problem, as mentioned by Greg Costikyan [1]. Discovery is broken, and so on, but it's not discovery - as in players actively seeking out games - I open any store on any platform and I'm inundated with choices. It's being discovered that's broken, being discovered by an audience who will truly appreciate what you've created.

The hard part is slicing the gaming landscape, and individuals' different experiences of the same game, to such depth that a Pandora-like algorithm could work effectively -- or relying on independent curation and journalism to step in and highlight the gems among a sea of overwhelming noise.

(If anyone wants to hack on the recommendations side of things, let me know!)

[1] http://www.gamasutra.com/blogs/GregCostikyan/20140324/213784...

waterlesscloud• 12 years ago

Google Play Store does do "people who bought this also bought...". It's useful to me in discovering things I want.

I'm a little skeptical of that rant you linked. Anyone blaming the audience's "lack of taste" is going to have a hard time of it, in games or music or books or movies or whatever. You just don't get to do that. You have to make things that satisfy you and the audience both. If you don't, that's your failure, not anyone else's.

TimJRobinson• 12 years ago

Is there any system for discovering games in a specific niche? I agree that a large issue is games are placed in one of 10 - 20 categories and there are no ways to niche down to find types that you'll enjoy.

In say music you can go into say the metal genre and find all kinds of super specific niches like death metal, viking metal, black metal etc each with their own hardcore fan bases who you can appeal to and target on sites specific to them.

Gaming doesn't have the same niching and with the explosion of indie and mobile games it really needs it. I for example love multiplayer sim games (anno series) and multiplayer tower defense games (tower wars, sol survivor) and instantly buy any games in these genres that I hear of (I bought a 4 back of sol survivor and 3 pack of tower wars as soon as I heard of them).

Now that I'm developing my own multiplayer tower defense game (http://www.towerstorm.com) I'd like to reach others like me who enjoy this genre but am finding it very hard to do so. I either have to market it to the masses or reach out to specific people via social media.

eloisant• 12 years ago

Considering what Steam or Apple provide, I don't think 30% is a rip-off.

You get hosting for both your page and downloads, update mechanism, statistics, a DRM that users don't hate, payment mechanism that users trust and already have their credit card registered...

All that costs money if you want to do it own your own, and you also get some exposure.

gedrap• 12 years ago

While fairly offtopic, this reminded me of Game Dev Tycoon ( http://www.greenheartgames.com/app/game-dev-tycoon/ ) which seems to be written using HTML5 + JS + Chromium.

I like this game, and I equally like the way they got traction. They released a restricted version on The Pirate Bay, although the description of the torrent was as if it was a full game. Not very usual, but nothing new either. But a well written blog post about it (http://www.greenheartgames.com/2013/04/29/what-happens-when-...) got them homepage of HN and loads of other press coverage, which helped to take off.

Well done.

mratzloff2• 12 years ago

It also helps when you base the game on one that's already very popular, Game Dev Story[1].

[1] http://itunes.apple.com/app/id396085661

tiquorsj• 12 years ago

Importantly, the posted version would let you play the game until your software (in the game) was ready to sell and then it would put up a shamer message about how you couldn't make money because everyone was pirating your game.

dsirijus3• 12 years ago

I think the main issue here is that people don't clearly delineate making games from making money.

You wanna make games? No one's stopping you from creating the most whackier experimental game this world has ever seen.

You wanna make money off that? You gotta wade through all kinds of shit, as is usual in most businesses. And before someone mentions Minecraft - it is such an outlier that it's not usable as argument in any discussion.

I don't subscribe to the self-entitled tone of the article that making games in itself is something virtuous and should be basically subsidized. I love Koster though, Theory of Fun for Game Design is what made me really interested in game development.

usea• 12 years ago

I think the main issue here is that people don't clearly delineate making games from making money.
You wanna make games? No one's stopping you from creating the most whackier experimental game this world has ever seen.

Creators still have to pay rent, buy food, and pay other bills. So unless you're privileged enough to be able to pay your bills without making any money, then yeah you do need money to make games.

hagbardgroup2• 12 years ago

The guy who made Banished contracted his way through the lengthy (something like 4 years) development. Functionally it cost him a lot of money and effort over time, but he did not need the extra overhead of a publisher (unless you consider Steam a sort of pseudo-publisher, which it is).

Money is just a thing we use to get other people who don't like us enough to work for us for free to do things for us. There are ways to get resources to make development possible beyond saving up a ton of cash (which carries a lot of risk in and of itself).

RKoster3• 12 years ago

You're misreading the issue. The issue is whether anyone can make money other than the few oligarchs who got in early. Whether anyone can make money unless they are pandering to the lowest common denominator for the sake of mere profitability. Whether even the top quality titles can make money given the need to spend at insane rates in order to be visible.

It's absolutely true you can do it for the love of it. Not questioning that. But the above is a recipe for a crash.

dsirijus3• 12 years ago

So what?

Do one for the money, the second for the show, third to get ready, and then make proper games. That's exactly what I'm doing now. Quite literally.

I can't wait to start doing games I'd like to play! Just few more months.

gavanwoolery• 12 years ago

I think you are correct. Koster seems to get a bit too political in his article, but I think there is room in gaming for a "subsidized" system, albeit more like HBO: one subscription base, content creators get paid essentially based on their number of users/viewers. Such a system does not have to be exclusive of course.

Side note: I also read A Theory of Fun almost a decade ago and it is still one of the better books I have read on the subject.

Negitivefrags3• 12 years ago

http://i1.wp.com/www.raphkoster.com/wp-content/uploads/2014/...

This image from the article is so true it actually hurts. The number of times our company has had a conversation like this would boggle the mind. We are not even a mobile game. We are a free to play PC title and we still get this garbage.

It's interesting that publishers for Asia don't have this mindset. They are willing to actually put money up front, something that no non-asian publisher has ever offered us.

Pxl_Buzzard• 12 years ago

Your staff page[1] doesn't show anybody in business / marketing roles. How do you handle website production, forums, marketing, legal, etc without dedicated staff? Even with a small group making a game engine[2] we're finding that those issues that pretty much require a full-time person.

1. http://www.grindinggear.com/?page=staff

2. https://github.com/Circular-Studios/Dash

Negitivefrags3• 12 years ago

That page is a bit out of date. We do have a marketing guy as of fairly recently.

The day to day business stuff is handled by our Managing Director (listed as Lead Designer on that page).

socialist_coder2• 12 years ago

You get those shitty publisher terms because the publisher has no idea if your game will be good or not. Why would they commit to spending anything before they know what kind of revenue & retention your game will have?

If you release your game yourself to a limited market, prove it has good revenue & retention stats, then shop around for a publisher, you get much better terms.

Negitivefrags3• 12 years ago

We did release the game ourselves and generated good revenue and retention. I'm certainly not complaining about our current level of success.

The (non-asian) publishers still come out of the woodwork to offer you these kinds of garbage deals. We just don't take them. The fact that we were already successful is why these leeches turn up in the first place.

These "publishers" are essentially glorified and very expensive user referral programs.

DannoHung• 12 years ago

Maybe they should ask to fuckin' play the damn game so they can decide whether it's worth a marketing spend.

hnnewguy• 12 years ago

Why would they commit to spending anything before they know what kind of revenue & retention your game will have?

Why would you sign a publishing deal if you know that your game has awesome retention and big revenues?

The idea is to share the risk.

existencebox• 12 years ago

This may not be the best place to fanboy, but I wanted to say how much I REALLY appreciate your guy's model. It's been a total breath of fresh air in an environment that supports the absolutely worst trends in perverse incentives for free to play games; so just, thank you to you and all of your team.

(on top of that, it's a damn solid game too.)

mratzloff2• 12 years ago

Oh, Path of Exile! A coworker was chatting with me about how much he liked the DLC model for that game because it doesn't give anyone a purchased advantage, it's strictly cosmetic. He also said that this was the game that Diablo III should have been.

ausjke4• 12 years ago

I wish they all go broke, 95% of the games whoever produced are mental drugs to the society, especially to young kids.

I hope one day that most games are illegal, just like the drugs.

If you have kids, you know what I mean.

angersock3• 12 years ago

Maybe people should try parenting instead of letting their kids play games? Or giving them cell phones?

Computer gaming is a hugely important industry, and the reason that we even have powerful computers and graphics cards today.

You need to defend your opinion a bit more if you want it treated as anything other than that, an opinion.

ausjke4• 12 years ago

My kids rarely play games, but I have seen too many kids doing that these days, obsessively.

one reason there are less boys in college than girls, guess what, games. I actually read this somewhere.

My piano teacher, whose two kids are still at home playing games, at their 20s.

You don't just blame drug abusers, you do also blame the drug dealers. In _most_ cases, game designers are doing the same thing as a drug dealer who sells the drug, wearing an IT hat. Parenting can not do this alone when gaming is now becoming a culture/fashion/addictive, due to our genius developers.

bendmorris• 12 years ago

Maybe people should try parenting instead of letting their kids play games? Or giving them cell phones?

I'm not sure if I'm reading this correctly, but this seems like a strange false dilemma. Kids shouldn't only play games, but there's nothing wrong with letting your kids play them in moderation. It certainly doesn't make you a bad parent, quite the opposite. Many games can improve critical thinking ability. I discovered programming as a kid out a desire to make games. If I hadn't been allowed to play them, I wouldn't be where I am today. Good parents should let their kids play games.

tdaltonc• 12 years ago

What is Humble Bundle in his ontology of 'the supply chain of creative work'?

it looks like they fill all of the same roles as Apple. I feel like this might not be the right way to divide the industry.

RKoster3• 12 years ago

Humble Bundle is basically a publisher with a web storefront. They leverage other distribution channels, and critically, have what's left of the gaming press as a very fruitful marketing channel.

They also mostly only publish things that are already hits, so in a lot of ways they are a re-user outlet.

tom_jones• 12 years ago

One solution. Stay out of the app store. Develop on the web in HTML 5.0. No businesses between you and the players there. Once you are a bit hit, you cut your own deal to go onto other platforms like Facebook and the app stores.

The Financial Future of Game Developers

Related Stories